G.R. No. 189881 April 19, 2017
Baclaran Marketing Corporation, Petitioner, vs. Fernando C. Nieva and Mamerto Sibulo, Jr., Respondents

FACTS

Petitioner Baclaran Marketing Corporation (BMC) was a defendant in a damages case arising from a vehicular collision. The trial court initially dismissed the complaint. However, on appeal by respondent Sibulo, the Court of Appeals reversed the trial court and held BMC liable. The CA decision became final and executory. The trial court issued a writ of execution and, upon finding BMC had no personal properties, levied on its real property. The property was sold at public auction to respondent Nieva. After BMC failed to redeem it, Nieva consolidated ownership and secured court orders for the cancellation of BMC’s title and the issuance of a writ of possession.
BMC filed a Petition for Annulment of Judgment before the CA, seeking to annul the writ of execution, the auction sale, and the subsequent orders from the land registration court. BMC alleged that its former counsel committed gross negligence constituting extrinsic fraud, as he never informed BMC of the appeal or the subsequent proceedings, assuring them the case was concluded by the favorable trial court decision. BMC claimed it only discovered the fraud when it tried to pay real estate taxes and found the title already transferred.

ISSUE

Whether the Court of Appeals erred in dismissing BMC’s Petition for Annulment of Judgment.

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the dismissal, holding that a petition for annulment of judgment was not an available remedy for BMC. First, the grounds for annulment under Rule 47 of the Rules of Court are strictly limited to extrinsic fraud and lack of jurisdiction. Extrinsic fraud refers to deceitful conduct by the prevailing party that prevented the losing party from presenting its case. The negligence of a party’s own counsel does not constitute extrinsic fraud. BMC’s allegations pertained solely to the neglect of its own lawyer, not to any fraud by Sibulo or Nieva.
Second, a client is generally bound by the mistakes and negligence of its counsel. The Court found BMC itself negligent for not inquiring about the status of its case for nearly two decades, especially after its counsel became a municipal mayor, which should have prompted vigilance. BMC’s failure to monitor its case and to inform the court of its address changes precluded it from claiming a denial of due process. Third, a writ of execution and an auction sale are not final judgments or orders that can be annulled under Rule 47; they are merely processes to enforce a final judgment. The final judgment subject to annulment would have been the CA decision holding BMC liable, but BMC’s petition targeted the enforcement proceedings instead. Therefore, the CA correctly denied the petition.